- Name: Hannah Bae
- Location: Brooklyn, NY
- Business: Noona’s Ice Cream
Tell us a bit about your business.
Noona means “big sister” in Korean. After winning best flavor for our signature Toasted Rice ice cream at an NYC annual ice cream contest, Noona’s was created in 2016 with the goal of making a line of Asian American ice cream flavors and doing it with a whimsical and playful palette unlike anything else in the category. It’s inspired by my passion for creating bigger, better, and more inclusive shelves in the ice cream aisle of America’s grocery stores.
Flavors range from beloved classics (think Black Sesame, Taro, Matcha Green Tea, and Yuzu) to whimsical fresh takes (imagine Turmeric Honeycomb, Mochi Cookies & Cream, Red Bean Chocolate Chip, and Vegan Rose Ginger). All our flavor inspirations come from my story of growing up Asian American and my passion for creating flavors that taste good and make us feel good because they authentically reflect the joys and struggles we all experience in a desire to make sense of the world and feel a sense of place.
What makes your small business unique from others?
Noona’s is here to reflect the faces, flavors, and culture of America now and tomorrow, while staying true to our roots. When you spot a pint of Noona’s, it’s clear how joyful and proud we are of our Asian American identity and how much we want to share that joy and deliciousness with all of you. I want to change the ice cream aisles of our neighborhood grocery stores through celebrating diversity in the ice cream community, championing Asian American flavors, and amplifying the people behind the supply chain and production. The brand slogan, “Trailblazing Asian American Ice Cream,” reflects our vision to expand our taste buds, have fun with flavor, and taste with an open mind.
Why did you decide to start your own business? How did you get started?
I couldn’t work for someone else. I had too many ideas and dreams. I’m an idealist, a dreamer, an overthinker, an overfeeler, an overachiever, and a worry wart. I put my entire being, heart, and soul into my actions and work. I deeply enjoy being hyper-focused and creating meaningful work with long-lasting authentic results.
What is the biggest lesson you learned in the first year?
Always have a backup plan…and then another one. As many as you can.
What was the most surprising thing about becoming a business owner?
You’re constantly problem-solving. There is no end. I guess this is not surprising, but it’s amazing how many things can go wrong in a single morning.
Always have a backup plan…and then another one. As many as you can.
What were some things you needed to teach yourself about running a business? How did you learn those things?
You need to be okay with figuring things out as you go. There’s so many situations that you can’t necessarily prepare for. You can put yourself in a position to succeed and be disaster-proof but none of the preparation ever makes situations any less hard when the mishaps and problems arise.
I am pretty much a self-taught entrepreneur, but isn’t every entrepreneur? That’s what makes owning and running your own business no easy feat. You need to have thick skin. You need to roll with the punches and expect to get hit some. You learn your strengths and weaknesses and figure out how to strengthen your strengths and not let the weaknesses hurt you or your business. You can do this by learning new skills or finding people that excel at the things you suck at. You learn to stay humble and be a constant student of the game.
How does running your own business make you feel?
Creating and running my own business keeps me driven, passionate, and focused. It gives me a space where I can be myself and take full responsibility for who I am and who I’m about to become. It gives me a space where I can let ideas flow and let my dreams become realities. Running a business is incredibly rewarding. All the stress, uncertainties, blood, sweat, and tears mean something because there is intention and vision through it all.
What are some of the challenges you’ve overcome or are working to overcome?
I bootstrapped my business and have grown Noona’s Ice Cream without any partners, investors, or outside capital. The truth is most businesses do not start or operate this way. Most businesses have outside funding of some sorts. Making Noona’s Ice Cream a truly profitable business has always been the aim and I’m proud to say that we are, although it is smaller than most. Working on healthy margins and building strong relationships with our manufacturers and suppliers are always constant challenges as these must be closely monitored and maintained over time.
What advice do you have for other entrepreneurs looking to start their own business?
There’s a lot of boring “office work” involved in entrepreneurship. Make sure you know what you’re getting yourself into.
What is your best advice to other small business owners for hiring and retaining staff?
Practice leadership. Be present. Check in on staff. Never look down on anyone in life; we are all the same. My staff works for me but I will never talk down to anyone or think I’m better than someone.
How do you manage to wear every hat that your business demands?
By not sleeping! [Laughs] Well, for the first three years I really only took two hour naps and never really slept. Balance comes later. You tell yourself in a couple years you’ll be sleeping eight hours and life will be different. You’re not sleeping, or eating well, or exercising, or relaxing, or doing anything but working at the start — so you can have all those other things later. And yes, I do get my eight hours of sleep now and can do other things besides work. Somehow, I even managed to get into amateur boxing. Who knew? Let life be absurd. Enjoy it. Work hard. Have a vision.
What challenges do you feel are unique to AANHPI business owners?
That’s a tough question and I can’t speak to other people’s struggles. My struggles are not solely because I’m Asian American. Being Asian American is a factor, but I’m not going to sit around trying to dissect that and theorize. People can disagree with my attitude, but it’s kinda like pondering nature versus nurture… it’s not one or the other.
What are your proudest moments?
The day I became a big sister (a noona), the day I launched Noona’s Ice Cream and won best flavor for our Toasted Rice on launch day, the day I started my boxing training and the day I registered for amateur boxing, and the day I decided to just dream and do great things.
What are the next big plans you have for your business?
I’d love to create an ice cream sandwich line.
When you’re having a tough day, who or what inspires you to keep going?
Structuring my thoughts and feelings succinctly into a poem has always inspired me to keep going. That or opening up a collection of poems by one of my favorite poets. And extra sleep. Sleep always helps.
How do you maintain a work/life balance as a small business owner?
Work/life balance cannot be maintained on a daily basis. Instead, the balance comes in increments of time. There are times where I just go-go-go nonstop and then there are times where I can relax a little bit and slow down. I barely slept in the first few years of business and now I can typically get a full night of sleep. Some years are rougher than others.
What’s your “power song” and why?
My power song is “God Bless The Child” by Billie Holiday. The blues gets me.
This article originally appeared on QuickBooks and was syndicated by MediaFeed.org.
How to automate your small business taxes
The taxability of a given product or service can vary from state to state, and in some cases, such as in Colorado, taxability can even vary from city to city. Location isn’t the only complication businesses face when calculating sales tax. Specific products and services can also have special or reduced rates and fees that need to be calculated at the point of sale
This is why mapping products and services to an appropriate tax category in any automated tax system are both very important and very powerful.
Sales tax is often complicated. Properly mapping products and services in your tax system will ensure that the correct taxability determination, accurate tax rate, and any applicable fees are being calculated for every sales transaction. (Curious how sales taxes affect your bottom line? Check out our sales tax calculator.)
The need for mapping products and services to tax categories is most apparent in these major areas:
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In the US, four states provide general exemptions for clothing, three states provide an exemption as long as the clothing is under a certain dollar amount, and one state taxes luxury clothing at a higher rate. The definition of what qualifies as clothing (clothing accessories, work clothing, protective equipment, etc.) is not uniform from state to state, so an item may qualify for the clothing exemption in one state but not in another.
To further complicate the issue, in 2018 sixteen states had sales tax holidays that provided exemptions for certain articles of clothing for limited periods of time.
Looking at the states with clothing dollar amount thresholds, we see that Connecticut, Massachusetts, New York, and Rhode Island are all subject to different thresholds. The thresholds are $50, $175, $100, and $250, respectively.
These states not only differ in thresholds, but they may also differ in how purchases that are over each unique threshold are treated.
Massachusetts
Massachusetts has a 6.25% sales tax rate for the entire state. For clothing, only the amount over the $175 threshold is subject to sales tax.
- Sales Transaction A: $100 Blouse. No sales tax applies because blouse is under $175.
- Sales Transaction B: $200 Blouse. Sales tax applies only to the portion over the threshold; $25. $200 – $175 = $25 * 6.25% = $1.56 Sales Tax
New York
New York has an 8.875% sales tax rate in NYC and other rates vary depending on the location of sale. For clothing, the entire amount is taxable if the item is over the $110 threshold.
- Sales Transaction A: $100 Blouse. No sales tax applies because the blouse is under $110
- Sales Transaction B: $200 Blouse. Sales tax applies to the entire item price; $200. $200 * 8.875% = $17.75 Sales Tax
If the taxability of clothing seems complex, it gets even more complicated as you look at more and more states. For example, one article of clothing that costs $1200 would be subject to different thresholds Massachusetts, New York, and Rhode Island, as well as taxable at a special rate in Connecticut, while being fully taxable in some states and exempt in others. Clothing rules can be more problematic than you think.
This shouldn’t make you worry. Properly mapping your clothing products to the correct clothing tax category in an automated sales tax system will ensure that the proper taxability determination, rate, and threshold rules are applied across all taxing jurisdictions.
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In 2018, seventeen states had sales tax holidays that exempted certain categories from state sales tax for limited periods of time. These categories included items like: back to school supplies, energy star appliances, and hurricane preparedness items.
Sixteen of these sales tax holidays exempted clothing. As a small business owner, you have to keep in mind that the sales tax holiday exemptions have similar intricacies as the year-round exemptions, including the definition of what qualifies as clothing for each holiday and how the thresholds vary from state to state.
For example, Alabama, Arkansas, Connecticut, Iowa, Maryland, Mississippi, Missouri, New Mexico, Oklahoma, Tennessee, Texas, and Virginia exempt clothing up to $100 during their sales tax holidays, while South Carolina has an unlimited exemption, Massachusetts exempts up to $2,500, and Ohio and Wisconsin exempt any clothing item under $75.
Your automated tax solution will automatically account for these sales tax holiday rules, as long as your products are set up correctly. In other words, in order for an exemption to properly calculate during a sales tax holiday, the item being sold must be properly mapped to the appropriate tax category.
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The majority of US states impose special rules on food. Most states exempt food for home consumption from sales tax entirely. Arkansas, Illinois, Missouri, Tennessee, Utah, and Virginia have special reduced rates for food for home consumption. Arizona and Louisiana exempt food at the state level but tax it at the general rate at the local level (some exemptions/reduced rates apply).
While individual states are ultimately responsible for defining the exact scope of special sales tax rules related to food and beverages, food for home consumption is generally accepted to include staple grocery items and foods which are not prepared prior to purchase and are not meant to be consumed on-premises. Candy and soft drinks can be included or excluded in this definition, depending on the state.
Many states, including Member States of the Streamlined Sales Tax Agreement, exclude prepared food, dietary supplements, and alcoholic beverages from the definition of eligible food for home consumption.
Example: A liter of soda is fully taxable in Minnesota and Illinois, while fully exempt in Massachusetts.
Example 2: A loaf of bread is exempt in Minnesota, taxable at a reduced rate in Illinois, and exempt in Massachusetts.
Again, properly mapping food items to the correct tax category will ensure that the proper taxability decision and reduced or full rates are applied across all jurisdictions.
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While most states provide an exemption for food for home consumption, food intended to be consumed on-site in places such as in a sit-down restaurant or when ordering take-out is generally taxable. Some states tax this type of food at the general rate, while others have special rates, called a Meals Tax.
Many local jurisdictions also impose a meals tax, even in states that have no other local taxes, such as Massachusetts or in states with no state sales tax, such as New Hampshire.
In an automated sales tax system, these rules will seamlessly be applied to your transactions once you have mapped all of your products and services accurately.
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Medical products is another area where states enact special tax rules. Many states provide a sales tax exemption for prescription drugs. The definition of what qualifies as a prescription drug, just like clothing and food, can differ from state to state.
For example, some states such as Missouri, exclude over-the-counter prescription drugs from their exemption. Other states such as Texas, exempt all drugs, regardless if they are or are not given under a prescription.
Why mapping is important in this area is because some states have a very broad definition of what qualifies as a “drug.” States are also increasingly providing exemptions for other medical items, such as feminine hygiene products.
Properly mapping a medical product to the most specific tax category in your automated tax system will ensure that the proper taxability determination is being applied across all jurisdictions and that your customers are getting all of the exemptions that the states have to offer.
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Products that are not exempt in any jurisdiction and are not covered by any sales tax holidays may still need to be mapped in your automated tax system to ensure not only a comprehensive collection of all relevant taxes but also of all applicable fees.
States may impose fees on items such as lead-acid batteries, tires, electronic items, bottled water, soda or alcohol containers, and E-911 charges.
Mapping to the proper tax category for these types of items will ensure that the proper taxability, as well as any applicable fees, are calculated by your automated system.
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The treatment of software and related services differ significantly from state to state. Prewritten software provided in tangible format is taxable in every jurisdiction with a sales tax. The treatment of software transmitted electronically, on the other hand, varies from state to state and can vary for a variety of reasons, including whether the software is custom, prewritten, transferred with tangible personal property, or comes with upgrade, updates, or technical support services.
The treatment of Software as a Service (SaaS) and other software related services also varies widely from state to state.
Similar to clothing, food, and medical items, not only does the sales tax treatment differ for SaaS, but the definition of what qualifies as SaaS and other software related services differs by state. This is another reason why it is critical to pick the most specific tax category that matches the products your business sells.
Software-related services may also be subject to special rates, such as the 1% Connecticut rate for computer and data processing services, or in Texas, where data processing services are only taxable at 80% of the base.
Automated Tax systems provide a significant number of software and software services tax categories where the underlying taxability is maintained across all jurisdictions and helps your business ensure the proper calculation of rates and taxability.
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Given the many variables and complexities around sales tax product and services categorizations, the solution is probably not DIY. When set up properly using a comprehensive software, you can take all of your compliance issues and turn them into an automated process that seamlessly and effortlessly calculates the right tax, at the right rate, for every transaction.
This article originally appeared on the Quickbooks Resource Center and was syndicated by MediaFeed.org.
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Featured Image Credit: QuickBooks.
